The government said the goal of the program was to help farmers earn more income and reduce financial disparities. But opponents have said the program will hurt consumers, who will pay more for rice, and Thai exports, which are expected to decline.

Thai Rice Packers Association president Somkiat Makayatorn said the mortgage pricing will result in higher prices for packed rice, particularly Thai jasmine rice, which is expected to increase Bt40/pack, or about 25% for a 5 kg package. The production cost of white rice of a 5-kg pack is also forecast to rise 40% to 50% or Bt20-30/kilo.

The amount of off-season rice to be produced in September-October is forecast at about 3.5 million tonnes, Thai rice companies said, but it will also depend on the ongoing flood situation in several parts of the country.

Meanwhile, Korbsook Iamsuri, president of the Thai Rice Exporters Association said when the price of rice reaches the government’s levels, rice export price will be $850, and it will be more difficult for Thai rice exporters to compete in the world market.

Sumeth Laomoraphorn, the chief executive of CP Intertrade Co, a leading local rice seller and exporter, was quoted in news reports as saying the high mortgage prices would cut the volume of Thai rice exports by at least 20%. He said the decrease would be offset by higher selling prices.

He said some 8 to 9 million tonnes are expected to ship out next year, compared with 11 million tonnes this year, but revenue income will increase 30% in line with the cost of paddy.

The government has said that it will help exporters in terms of credit, finding new markets and organizing promotional campaigns overseas. To assess the rice export situation next year, it must monitor rice prices after the launch of the rice mortgage scheme.

Anticipation of the plan has led to widespread hoarding, according to press reports, with an estimated 3 million tonnes of rice stockpiled in recent weeks to gain from higher prices from the plan.